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Vanguard 500 Index Inv Message Board

  • nys2pa nys2pa Sep 17, 2008 5:29 PM Flag

    Bailing out of Vanguard 500 Index Fund

    Anyone bailing out of Vanguard 500 index fund yet? going into bonds/retirement funds, other safer havens? Please post your comments.

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    • This is the time to be adding positions into the 500 not selling.

    • I took my 330 shares out in Sept at $118, sooooooooooo glad I did. I don't think it will get back there for quite some time.

    • Did so in December 2007 for VFINX, wish I would have 2 months sooner. Went into Bonds, lost there too, just not as much.

    • I pulled it all out early sept at $118 and change, saved 1000's. had 660 shares, knew it was going to get worse as their portfolio was thick with banking.

      • 2 Replies to m8kmerich
      • I'm a young investor, and having money laying around when I turned 18, I decided it was time to build my own portfolio. This was my first fund, and I've faithfully added to it every month for the past two years.

        I started small, with like $6000, and add $200-400 a month. I have taken a severe beating over this crisis, and my VFINX position is lower than my initial investment... quite disheartening. This week I purchased another $6000, lowering my cost basis. I love when prices drop.

        40+ years til retirement for me. I can wait this one out.

      • well, you're very fortunate. i for one did exactly the opposite and invested a large sum at 118.00 when it looked like a buying opportunity. i feel like a "fool with his money" and have no choice but to believe that this hemmorage will stop st SOME point. that is if no one tests the president in his first few months of office and brings the VFINX any lower. any thoughts or similar stories?

    • Hi, I have a large percentage of my IRA savings in this account. I have always wondered - if this is supposed to be based on the S&P 500 - why is that not reflected in the day to day price? For instance the S&P is up quite a bit today but this fund is down.

      Thanks in advance for any answers.

    • Just the oppisite....I have 20 years to go for retirement....What a buying oppertunity we have right now....I have faith that we will make it through this debacle and so does buffett....He just put another 3 billion into the market today...In fact a S&P componet...GE..If you have time on your side just hang in there and you will make out....

      • 1 Reply to reesedickson
      • Careful about Buffett though. He invested tens of millions of dollars in Bank of America last summer. I was skeptical enough to put a trailing stop to sell at $43 per share. Had BAC a couple of years so it produced dividends. I think I came out even. And now today...Ta Da! BAC announces it will halve its dividend. Buffett is not as good as he used to be. You have to wonder about his political agenda too. Other than that, I'm bullish on the S&P 500, but not because Buffett is pushing value stocks.

    • Now is not the time to sell this Vanguard fund. Selling now will only lock in a loss.

      While money is invested in this fund, it will still earn dividend income. Recently, that has been about 2.17 percent. However, this percentage may go lower if the economy continues to weaken.

      To help offset the current drop in value of this mutual fund, dollar-cost averaging could be employed. That is, continuing to buy into this fund as the market decline persists will help balance out the fund's present drop in value after the overall stock market hits bottom and recovers. In essence, we will be buying future shares of this fund at a lower price, and then selling these shares at a higher one after the economy improves. This process will lower our average cost per share over time, and it may take awhile to be effective so be patient.

      This advice applies to anyone who does not need his or her money for the next five years. If that is not the case, investing now in any mutual fund or any stock would not be a good idea. Insured CDs at 4% interest would be a much better investment for those who have short-term financial needs or goals.

      While it's easy to give advice, I fully understand that it's very difficult to witness the current market decline. But we must resist the temptation to give into panic selling. It will only make the situation worse, not better. Why? Because we will be unwittingly assisting in the overall price decline of stocks by dumping our mutual fund shares today. In essence, we will be giving up shares of this mutual fund at a considerable discount to those who are "bottom feeding." Why make someone else wealthy when all we need to do is resist our fear and ignore the gloom and doom that we read or hear daily? The current conditions are, indeed, serious, but we are not facing 1929 all over again. Thus, the time to sell this fund, or any mutual fund for that matter, is when a peak has been reached and the prospect for future growth appears uncertain. That is certainly not the case today.

      • 2 Replies to Artar1
      • I agree with your post. I invest in this fund weekly in my IRA and monthly outside my IRA. I hate the direction this country is going (bailing out irresponsible Joe Six Pack and big mortgage banks at the expense of responsible humble savers). But we will have our shining days ahead of us. This bailout is going to backfire. It will be about 2 years at most before we realize it. At that point we will vote out the Party of the majority of the Congress that voted for the bailout and put the other party back in office. House prices are still going to fall tremendously and should be allowed to, in order to reestablish affordability for first time buyers.

        The yield on VFINX is now about 2.3%, better than a 2 year note. If you still have a job over the next 7 years and regularly invest in this fund, you will be ahead of the game with a comfortably low average cost.

      • Thanks for all the comments folks. Does anyone know a good historical track record of the 500 index fund? Can we "predict" what a worst case bottom price will be looking at the history? I mean, the crisis has just started, and it really could be worse than 1929, just look at the sheer volume that is at stake here! We have heard only a few big names go down, Lehman and AIG and now Morgan Stanley the latest, there are scores if not hundreds on others just lying low. We have seen nothing yet! Sell Sell Sell!! We can buy back the 500 Index funds when they sell for $10 a piece later...maybe not that low but 50 to 70 is possible!

    • Just the opposite. I was in the Target 2025 and moved all into the 500 Index. Got to believe this is an opportunity.

    • Now is not the time to sell this Vanguard fund. Selling now will only lock in a loss.

      While money is invested in this fund, it will still earn dividend income. Recently, that has been about 2.17 percent. However, this percentage may go lower if the economy continues to weaken.

      To help offset the current drop in value of this mutual fund, dollar-cost averaging could be employed. That is, continuing to buy into this fund as the market decline persists will help balance out the fund's drop in value after the overall stock market hits bottom and recovers. In essence, we will be buying shares of this fund a lower price, and then selling them at a higher one after the economy improves. This process may take awhile so be patient.

      This advice applies to anyone who does not need his or her money for the next five years. If that is not the case, investing now in any mutual fund or any stock would not be a good idea. Insured CDs at 4% interest would be a much better investment for those who have short-term financial needs or goals.

      While it's easy to give advice, I fully understand that it's very difficult to witness the current market decline. But we must resist the temptation to give into panic selling. It will only make the situation worse, not better. Why? Because we will be unwittingly assisting in the overall price decline of stocks by dumping our mutual fund shares today. In essence, we will be giving up shares of this mutual fund at a considerable discount to those who are "bottom feeding." Why make someone else wealthy when all we need to do is resist our fear and ignore the gloom and doom that we read or hear daily? The current conditions are, indeed, serious, but we are not facing 1929 all over again. Thus, the time to sell this fund, or any mutual fund for that matter, is when a peak has been reached and the prospect for future growth appears uncertain. That is certainly not the case today.

 
VFINX
183.76+0.46(+0.25%)Aug 20 6:24 PMEDT

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